UnitedHealth Ruling Cites Flaws in System

July 1, 2006

The judge who recently ruled in favor of UnitedHealth Group in a massive class-action suit that has been dragging through the courts since 1999, presented the state of the country's health coverage system as a somewhat dichotomous mess. "Those desiring changes in the way health care is provided in America must either look for remedies before Congress or allow the free market to dictate the results," wrote U.S. District Judge Federico A. Moreno, of the Southern District of Florida.

In fact, Moreno wrote that "no reasonable juror could return a verdict in the plaintiff's favor" and that there was insufficient evidence that the two health insurers were guilty of "agreeing with their competitors to defraud the doctors."

Moreno made the pronouncement on June 19, when he dismissed all claims that remained against UnitedHealth and Coventry Health care. This is the latest installment of a class-action suit filed by 700,000 physicians who charged that numerous health plans colluded to not pay them or to pay them too late and/or too little. The other plans involved (deep breath!) — Aetna, Anthem Blue Cross and Blue Shield, Cigna, Health Net, Humana, PacifiCare Health Systems, Prudential Financial Securities, and WellPoint Health Networks — had previously settled for a combined $646 million.

UnitedHealth, and the much smaller Coventry, were holdouts. "After reviewing thousands of documents, there is simply insufficient evidence of the wrongdoing claimed," Moreno wrote.

As the Wall Street Journal puts it: "The motion was a victory for UnitedHealth, whose board and management have come under fire in recent months over the pricing and timing of stock options granted to Chief Executive William McGuire and other top executives." The Securities and Exchange Commission has begun an inquiry, the article notes, and UnitedHealth's shares are down nearly 30 percent this year.

McGuire issued a statement. "We are pleased with today's decision. Looking ahead, UnitedHealth Group will continue to focus on our overarching goal: workings constructively with physicians and other partners to provide all Americans with greater access to affordable, quality health care."

However, it may not yet be over, says Archie Lamb, co-lead lawyer for the doctors. Health plans that have settled cannot be sued again. Not so with UnitedHealth, Lamb tells the Journal. "They may think they've won the war, but it is only a battle."